Do you want to start a gold buying and selling business? If YES, here is a complete guide to starting a gold buying and selling business with NO money and no experience.
Okay, so we have provided you an in-depth sample gold buying and selling business plan template. We also took it further by analyzing and drafting a sample gold and silver retailing marketing plan backed up by actionable guerrilla marketing ideas for gold buying and selling businesses. In this article, we will be considering all the requirements for starting a gold buying and selling business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Gold Buying and Selling Business?
If you have a penchant for gold and jewelries, you can indeed make good money from this trade if only you are willing to start your own gold buying and selling business. Gold buying and selling business is one business that is uncommon not only in countries without goldmines, but also in countries with rich deposits of gold. People who are involved in the gold buying and selling business would admit that they are making huge returns on their investment.
If you intend starting your own gold buying and selling business, then you must take out time to learn the trade. This is because it only takes someone who has the technical skills and one who can truly differentiate between various grades and quality of gold to make it really big in this line of business.
It is important to state that starting a gold buying and selling business requires a reasonable start-up capital, and the ability to network and market high profile clients in the society. Sincerely, gold is considered to be a luxurious commodity and the people that purchase it are those who are well to do. That is the reason why you must be prepared to target this class of people if you truly want your gold buying and selling business to succeed.
Before launching this type of business, it will pay you to carry out your due diligence as it relates to market research, economic and cost analysis and of course feasibility studies. If you get things right before launching your gold buying and selling business, it will not take you long before you break even and start smiling to the bank.
So, if you have the desire of starting your own gold buying and selling business, all you need do is to read this article and you will be well equipped. You can start your gold buying and selling business from a small town in the United States and if you are consistent and creative, it won’t be too long before your brand becomes an internationally recognized brand.
Starting a Gold Buying and Selling Business – A Complete Guide
- Industry Overview
Businesses in the Jewelry Stores industry that the gold buying selling business is a part of, basically sell new jewelry, timepieces and sterling and plated silverware. Businesses that sell these products in combination with engraving or repair services are also part of the Jewelry Stores industry.
If you are a close observer of the Jewelry Stores industry you will agree that as unemployment and poverty rates have reduced, consumer confidence has returned to healthy levels and demand for gold and other jewelry products has grown, helping the Jewelry Stores industry regain its luster.
Nevertheless, recent tightening in the world price of gold have suppressed jewelry prices in recent years and reduced industry revenue. As the economy has improved, growing disposable income has encouraged more consumers to purchase discretionary jewelry pieces. High-income consumers are more likely to purchase luxury goods that provide greater returns to operators, boosting industry profit.
Interesting Statistics About the Gold Buying and Selling Business
The Jewelry Stores industry that gold buying and selling is part of is indeed a major sector of the economy of most countries in the world (United States of America, Italy, France, United Kingdom, China, Switzerland, South Africa, Ivory Coast, India et al).
Statistics has it that in the United States of America alone, the Jewelry Stores industry generates a whooping sum of $35 billion annually from more than 63,479 registered and licensed Jewelry Stores scattered all around the United States of America.
The industry is responsible for the employment of well over 174,128 people. Experts project the Jewelry Stores industry to grow at a 1.2 percent annual rate. The establishment in this industry that has dominant market share in the United States of America is Signet Group.
Research conducted by IBISWORLD shows that the Jewelry Stores industry is in the mature phase of its life cycle. IBISWorld expects industry value added (IVA) which measures the industry’s contribution to the overall economy, to grow at an average annual rate of 0.4 percent over the 10 years to 2021. The report further stated that GDP is expected to grow at an annualized 2.2 percent during the same period.
The reduction in IVA is largely attributable to decline in the price of gold throughout much of the period. So also, retail store technology in this industry has not changed significantly over the five years to 2016 and is not expected to experience any substantial growth during the next five years.
The Jewelry Stores industry will continue to blossom because keeping gold and other jewelry for fashion and investment have become a way of life for people with the financial means.
Over and above, the Jewelry Stores industry is a profitable industry and it is open to any aspiring entrepreneur to come in and establish his or her business. You can choose to start on a small scale by opening a store in your local community or you can choose to start on a large scale with a standard store in a major city, while buying gold from the international market all across the globe.
Starting a Gold Buying and Selling Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who wear gold jewelries or purchase gold as a form of investment cut across all genders; male and female with the financial means would do all that is within their power to have gold jewelries in their collection, hence the demographic composition for the gold buying and selling business is all-encompassing.
So, if you are thinking of starting your own gold buying business, you should look beyond people in your city and reach out to people across the United States of America and other parts of the world.
List of Niche ideas Within the Gold Buying and Selling Business That You Can Specialize in
It is important to state that there is no known niche area in the gold buying and selling business. Every player in this line of business usually buys and sells gold. Most often than not, those involved in gold buying and selling are also involved in selling diamond jewelry, pearls and other gemstone jewelry, loose gemstones including diamonds and colored gemstones, watches and other merchandise.
The Level of Competition in the Jewelry Stores Industry/Gold Buying and Selling Business
The competition that exists in the jewelry stores industry cum gold buying and selling goes beyond the competition in your city or country; it is both national and international. This is so because major gold buying and selling store brands in China, Germany, Saudi Arabia, France, India, Italy, United Kingdom and in any part of the world can sell their products all across the United States of America. So, it will be right to say the competition in the Jewelry Stores industry is tough.
The truth is that no matter the level of competition in an industry, if you have done your due diligence and you promote your products or business properly, you will always make headway in the industry. Just ensure you have what it takes to identify and purchase original gold jewelries and you know how to reach out to your target market.
But over and above, there are several gold buying and selling stores scattered all around the United States. So, if you choose to start your own gold buying and selling business in the United States, you will definitely meet stiffer competitions amongst gold buying and selling stores not only in the United States of America, but all across the world. Besides, there are larger jewelries stores cum gold buying and selling stores that determine the trends in the industry and you should be ready to compete with them for customers.
List of Well-Known Brands in the Gold Retailing Industry
In every industry, there are always brands who perform better or are better regarded by customers and the general public than others. Some of these brands are those that have been in the industry for a long while and so are known for that, while others are best known for how they treat their customers.
These are some of the leading jewelry stores (gold buying and selling stores)/brands in the United States of America and in the globe;
- Signet Group
- Silver and Gold Exchange
- Pure Gold Global
- Sterling Jewelers Inc.
- Fred Meyer Jewelers
- Helzberg Diamonds
- Ultra Stores Inc.
- Samuels Jewelers
- Tiffany & Co.
- Rogers Enterprises
- Ben Bridge Jeweler
- Charm Jewelry Ltd.
- Reeds Jewelers
- James Avery Craftsman
- Sherwood Management Co.
- Ben Moss Jewellers
- Birks & Mayors Inc.
- Hannoush Jewelers
- Maui Divers Of Hawaii
- Riddles Group, Inc.
If you are looking towards successfully launching a business and maximizing profit, then you need to ensure that you get your economic analysis right and try as much as possible to adopt best practices in the industry you choose to build a business in.
Gold buying and selling business is not a green business; as a matter of fact, you will come across several jewelry stores when you go shopping for gold jewelries. So, if you are mapping out your economic analysis, you should carry out thorough market survey and costing of the required gold jewelries and other equipment needed to successfully run the business.
Over and above, if you are considering starting a gold buying and selling business, then your concern should not be limited to the cost of renting a store and stocking your store with gold jewelries and other jewelries but also on branding and how to build a robust distribution network. The truth is that if you are able to build a robust supply network, you are sure going to maximize profit in the business.
Starting Your Gold Buying and Selling Business from Scratch vs Buying a Franchise
If you are looking towards starting a gold buying and selling business, you would have to start from the very scratch because you can hardly get a franchise of a jewelry store cum gold buying and selling business to buy. It is a business that is open to all and sundry.
Besides, starting a jewelry store cum gold buying and selling business from the scratch is less stressful when compared to other small scale businesses which usually require detailed groundwork before launching the business. With the gold buying and selling business, you should just try as much as possible to secure a shop that is close to a major road and then leverage on every marketing tool within your disposal, especially the internet, to market your gold and other jewelries.
Please note that most of the big and successful jewelry stores cum gold buying and selling business around started from the scratch and they were able to build a solid business brand. It takes dedication, hard work and determination to achieve business success and of course you can build your own gold buying and selling business brand to become a successful brand with corporate and individual customers from all across the length and breadth of the United States of America and other countries of the world.
Possible Threats and Challenges You Will Face When Starting a Gold Buying and Selling Stores
If you decide to start your own jewelry stores/gold buying and selling business today, one of the major challenges you are likely to face is the presence of well-established jewelry stores/gold buying and selling stores whose clients can be found all across the United States and the global market. The only way to avoid this challenge is to create your own market.
So also, just like any other business, one of the major threats that you are likely going to face is economic downturn and unfavorable government policies. It is a fact that economic downturn affects purchasing power especially for luxury products such as gold jewelries. Another threat that you may likely face also is the arrival of a new gold buying and selling store or even a jewelry store that also buys and sells gold jewelries in the same location where yours is located.
Starting a Gold Buying and Selling Business – Legal Matters
- Best legal entity to use for this type of business
When considering starting a gold buying and selling store or jewelry store, the legal entity you choose will go a long way to determine how big the business can grow. Some gold buying and selling stores or jewelry stores design their business and products for the regional market, some for national market, while others are for the international market.
Generally, you have the options of either choosing a general partnership, limited liability Company which is commonly called an LLC, or a sole proprietorship for a business such as a Jewelry Store. Ordinarily, sole proprietorship should have been the ideal business structure for a small – scale gold buying and selling store or jewelry store especially if you are just starting out with moderate start-up capital.
But people prefer limited liability Company for obvious reasons. As a matter of fact, if your intention is to grow the business and have clients across the United States of America and other countries of the world, then choosing sole proprietor is not an option for you. Limited Liability Company, LLC or even general partnership will cut it for you.
For example, setting up an LLC protects you from personal liability. If anything goes wrong in the business, it is only the money that you invested into the limited liability company that will be at risk. It is not so for sole proprietorships and general partnerships. Limited liability companies are simpler and more flexible to operate and you don’t need a board of directors, shareholders meetings and other managerial formalities.
Catchy Business Name Ideas Suitable for a Gold Buying and Selling Store
When it comes to choosing a name for your business, you should be creative because whatever name you choose for your business will go a long way to create a perception of what the business represents. Usually it is the norm for people to follow the trend in the industry they intend operating from when naming their business.
If you are considering starting your own gold buying and selling business/jewelry store, here are some catchy names that you can choose from;
- Madam Abigail Gold Store, Inc.
- Irene Temple Gold Store, LLC
- Taffy Grant Jewelry Store, Inc.
- Precious Bon Gold Store
- Tina Heck Jewelry Store, Inc.
- Bronx Noel Gold Store, Inc.
- Fritz Mason Gold Buying and Selling Company
- George Mann Gold Buying and Selling Store, LLC
- Beci Stone Stores, Inc.
- Uriel Lopez Gold Store, Inc.
In the United States and in most countries of the world, you can’t operate a business without having some of the basic insurance policy covers that are required by the industry you want to operate from. So, it is important to create a budget for insurance and perhaps consult an insurance broker to guide you in choosing the best and most appropriate insurance policies for your gold buying and selling business.
Here are some of the basic insurance covers that you should consider purchasing if you want to start your own gold buying and selling business in the United States of America;
- General insurance
- Health insurance
- Liability insurance
- Workers compensation
- Overhead expense disability insurance
- Business owner’s policy group insurance
- Payment protection insurance
Intellectual Property Protection/Trademark
If you are considering starting your own gold buying and selling business, usually you may not have any need to file for intellectual property protection/trademark. This is so because the nature of the business makes it possible for you to successful run the business without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
But if you just want to protect your company logo and other documents or software that are unique to you or even jingles and media production concepts, then you can go ahead to file for intellectual property protection. If you want to register your trademark, you are expected to begin the process by filing an application with the USPTO. The final approval of your trademark is subject to the review of attorneys as required by USPTO.
Is Professional Certification Needed to Buy and Sell Gold and Silver?
When it comes to the gold selling and buying business, you do not need to have any formal training or special certification before you can be allowed to start a gold selling and buying business. All you need is informal training that will expose you to the in and out of the business.
With that, you will be able to maximize profit in the business. On the other hand, if you come across any form of certification that can aid you to conduct your gold buying and selling business well, then by all means try and pursue such certification.
List of Legal Documents You Need to Run a Gold Buying and Selling Business
The essence of having the necessary documentation in place before launching a business in the United States of America cannot be overemphasized. It is a fact that you cannot successfully run any business in the United States without the proper documentations. If you do, it won’t be too long before the law catches up with you.
These are some of the basic legal documents that you are expected to have in place if you want to legally run your own gold buying and selling business or jewelry store in the United States of America;
- Certificate of Incorporation
- Business License
- Business Plan
- Non – disclosure Agreement
- Employee Handbook
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Apostille (for those who intend operating beyond the United States of America)
- Company Bylaws
- Memorandum of Understanding (MoU)
Financing Your Gold Buying and Selling Business
Starting a gold buying and selling business can be cost effective especially if you choose to start on a small scale by running a small store in a street corner. Securing a standard and well-positioned store facility and stocking your store with gold and other precious jewelries are part of what will consume a large chunk of your start-up capital, but if you choose to start the business on a large scale, you would need to go source for fund to finance the business because it is expensive to start a standard large scale gold buying and selling business/jewelry store.
No doubt when it comes to financing a business, one of the first thing and perhaps the major factors that you should consider is to write a good business plan. If you have a good and workable business plan document in place, you may not have to labor yourself before convincing your bank, investors and your friends to invest in your business.
Here are some of the options you can explore when sourcing for start -up capital for your gold buying and selling business;
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for loan from your bank/banks
- Pitching your business idea and applying for business grants and seed funding from donor organizations and angel investors
- Source for soft loans from your family members and your friends
Choosing a Suitable Location for a Gold Buying and Selling Business/Jewelry Store
When it comes to choosing a location for your gold buying and selling business/jewelry store, the rule of thumb is that you should be guided by the demand for such luxury products and easy access to purchasing pure gold and other precious stones/metals. Of course, if you are able to secure a central location for your gold buying and selling business/jewelry store, it will give people easy access to locate your store.
It cannot be overemphasized that the location you chose to open your gold buying and selling business/jewelry store business is key to the success of the business, hence entrepreneurs are willing to rent or lease a facility in a visible location; a location where the demography consists of people with the required purchasing power and lifestyle.
If you make the mistake of renting or leasing a facility for your gold buying and selling business/jewelry store in a not too visible or hidden location simply because it is cheap, then you must be prepared to spend more in promoting the business and perhaps giving direction to potential clients.
These are some of the key factors that you should consider before choosing a location for your gold buying and selling business/jewelry store;
- The demography of the location
- The demand for gold and jewelries in the location
- The purchasing power of the residents of the location
- Accessibility of the location
- The number of gold buying and selling business/jewelry stores in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
Starting a Gold Buying and Selling Business – Technical & Manpower Details
On the average, there is no special technology or equipment needed to run this type of business except for secured safes, shelves and software applications. So also you will definitely need computers/laptops, internet facility, telephone, fax machine and office furniture (chairs, tables and shelves) amongst others and all these can be gotten as fairly used.
As regards leasing or outright purchase of a store facility, the choice is dependent on your financial standing, but the truth is that to be on the safe side, it is advisable to start off with a short term rent/lease while test running the business in the location. If things work out as planned, then you go on a long term lease or outright purchase of the property but if not, then move on and source for other ideal location/facility for such business.
When it comes to hiring employees for a standard gold buying and selling business/jewelry store, you should make plans to hire a competent Chief Executive Officer (you can occupy this role), Admin and Human Resources Manager, Merchandise Manager, Sales and Marketing Officer/Sales Girls and Sales Boys, and Accounting Clerk.
These are some of the key employees that you can work with. On the average, you will need a minimum of 3 to 6 key staff members to run a small scale but standard gold buying and selling business/jewelry store.
The Service Delivery Process Involved in a Gold Buying and Selling Business
When it comes to buying and selling stuffs, there are no hard and fast rules about it. Basically, it is the duty of the merchandise manager to help the store stock goods (gold, precious stones, diamonds and other jewelries). They go out there to source for good purchasing deals and they also ensure that they do not only purchase at the right prices that will guarantee them good profits, but also they ensure that they purchase original gold. This is so because there are fake gold out there and it takes someone with the right training and skills to differentiate fake gold from original gold.
Once the gold jewelries and precious stones are bought, they are properly arranged in the store for customers to see and purchase. On the other hand, they are also expected to purchase gold from customers who want to sell their gold and make quick money.
It is important to state that a gold buying and selling business/jewelry store may decide to improvise or adopt any business process and structure that will guarantee them efficiency and flexibility; the above stated gold buying and selling business/jewelry store process is not cast on stone.
Starting a Gold Buying and Selling Business – The Marketing Plan
- Marketing ideas and strategies
Generally, running a business requires that you should be proactive when it comes to marketing your goods or services. If you choose to launch a gold buying and selling business/jewelry store, then you must go all out to employ strategies that will help you attract customers or else you will likely struggle with the business because there are well – known brands determining the market direction for gold buying and selling business/jewelry stores industry.
These are some of the marketing ideas and strategies that you can adopt for your gold buying and selling business/jewelry store;
- Introduce your products by sending introductory letters alongside your brochure to corporate organizations, households, socialites, celebrities and other key stakeholders throughout the city where your gold buying and selling business/jewelry store is located.
- Advertise on the internet, on blogs, on forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across, so that people would know where to go when they need to purchase gold and other precious stones and jewelries
- Create a basic website for your business so as to give your business an online presence
- Directly market your products
- Engage in road show in targeted communities from time to time to sell your products
- Join local gold buying and selling business/jewelry store associations for industry trends and tips
- Provide discount days for your customers
- Advertise your business in community based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word of mouth marketing (referrals)
Strategies to Boost Your Brand Awareness and Create Your Corporate Identity
If your intention of starting a gold buying and selling business/jewelry store is to grow the business beyond the city where you are going to be operating from to become a national and international brand, then you must be ready to spend money on promotion and advertisement of your brand.
No matter the industry you belong to, the truth is that the market is dynamic and it requires consistent brand awareness and brand boosting cum promotion to continue to appeal to your target market. Your corporate identity has a lot to do when it comes to building a business that is profitable and last long.
Here are the platforms you can leverage on to boost your brand awareness and create corporate identity for your gold buying and selling business/jewelry store;
- Place adverts on both print (newspapers and health magazines) and electronic media platforms
- Sponsor relevant community based events/programs
- Leverage on the internet and social media platforms like; Instagram, Facebook, Twitter, YouTube, Google + et al to promote your products
- Install your Bill Boards on strategic locations all around your city or state
- Engage in roadshow from time to time in targeted neighborhoods to create awareness of your gold buying and selling business/jewelry store.
- Distribute your fliers and handbills in target areas
- Contact corporate organizations, households, socialites, celebrities and other key stakeholders throughout the city where your gold buying and selling business/jewelry store is located informing them about your business and the products you retail
- List your gold buying and selling business/jewelry store in local directories/yellow pages
- Advertise your gold buying and selling business/jewelry store in your official website and employ strategies that will help you pull traffic to the site.
- Ensure that all your staff members wear your branded shirts and all your vehicles and trucks/vans are well branded with your company logo et al.